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Market Report

Tuesday, 19-Mar-2013

NSE

  • After a higher start at 19,378.61 today, the Sensex dropped below 19,000 level before ending 285.10 points or -1.48% lower at 19,008.10, a level last seen on March 5. The NSE index Nifty shuttled between 5,863.60 and 5,724.30 before ending lower by 89.30 points or -1.53% at 5,745.95 today.

  • Market sentiment battered after a major constituent of the ruling UPA government DMK withdrew its support over the issue of alleged human rights violations of Tamils in Sri Lanka. However, the Congress-led government said there was no threat to its stability. Traders said the market had received another jolt before this when the RBI cut key interest rate by 0.25 per cent but indicated that there is limited room for further monetary easing. The DMK pulling out the support from government spoiled the much created mood on rate cut expectation, they added.

  • A weak trend in the Asian region and lower opening in Europe before Cypriot lawmakers meet to discuss a bank-deposit levy, also shadowed the region stock markets, traders said. Financial and interest sensitive stocks were major losers and pulled down the benchmark to suffer its biggest single day loss in last three weeks.

  • Markets may test budget lows again, says Mitesh Thacker. I had talked about if the Nifty starts trading below 5820, we will see an immediate test of around 5750 and that has happened, he says.

  • Markets maintained range despite political uncertainty, says Ashwani Gujral. In ordinary circumstances, I am sure you would expect more than a 1% decline on the government possibly falling. Also, stock prices are low enough to make a trading gain. Around 5650-5700 we buy, around 5950-6000-6050 those are the levels we sell into. So right now you need to buy, says Gujral.

  • Analysts are of the view that going forward political uncertainty is likely to increase further and this may impact the government's ability to implement the reform process. FIIs may lose faith in the reforms process. Though the rate cut was on expected lines, the hawkish stance by the RBI commentary weighed on the market, according to analysts. Economists are of the view that the RBI is not likely to end its rate easing cycle here and at least two more rate cuts can be expected.

NIFTY 3-Month

(Data/Charts courtesy NSEI/Yahoo!/iCharts/The Economic Times)